Hopefully you already know the Injective Protocol. Otherwise, it is still time to learn. According to their description on CoinMarketCap:
Injective Protocol describes itself as the first layer-2 DEX that unlocks the full potential of decentralized derivatives and borderless DeFi.
The Injective Chain is implemented as a Cosmos SDK module, built with Ethermint (EVM on Tendermint). It utilizes a Tendermint-based Proof-of-Stake to facilitate cross chain derivatives trading across Cosmos, Ethereum, and many other layer-1 protocols. In addition, the protocol is collision resistant and utilizes Verifiable Delay Functions (VDFs) to prevent front-running.
The key points here are:
- Layer-2 DEX: it is a decentralized exchange on layer 2, which means that it uses a scaling mechanism which is not programmed into Ethereum protocol, thus reducing significantly the transaction fees. As we all know, gas fees are Ethereum's major issue, which is fixed by layer-2
- Cosmos SDK: a framework for building blockchain applications in Golang - an open source programming language. Using Cosmos SDK allows INJ to go through Cosmos Hub to create a truly decentralized exchange
- EVM: the EVM (Ethereum Virtual Machine) Execution Environment function allows developers to build Ethereum-based dApps but in a more scalable environment using the PoS consensus algorithm
The tokenomics of this token are also quite favorable to its value: INJ has a maximum total supply of 100 million tokens and a 7% annual inflation rate which will be systematically reduced to 2% over time. Furthermore, the token has a buyback and burn program to reduce the total supply over time, making INJ a deflationary token.
Too good to be true? Maybe. However, the graph below shows that INJ is quite successful, and as the inflation rate is planned to be reduced to 2%, it still has a huge growth potential.
Nobody knows whether it is the next YFI. But if you could go back to July, wouldn't you buy a bit of YFI even if you were not sure yet that it will grow?
Remark: please note that it is not a financial advice, but just an opinion. You may have a look at my other articles on DeFi tokens: SNX and YFI.
